A Guide to Property Investment Research from Your Computer

Searching property is not Researching Property.

Property investment research is mandatory before you purchase any property. At Empower Wealth we believe that this part of the process is absolutely non-negotiable. But with so many aspects to consider before you even start searching for a property, it might get a bit confusing. Luckily, with the invention of the internet, this kind of research is becoming easier. Are you wondering about how to conduct a property research from your computer? Then look no further, follow these next few steps and finding valuable properties in the future will be as simple as typing a few words into a search engine.

Start with the Basics

As with everything else, the first step of property research is to get the basics right. By this we mean, why invest in property in the first place? Do you know how property investment works? How much rental yield are required to make property investing a profitable investment? What makes you think property investment is suitable for you? What kind of strategies are available out there? And most importantly, what is the process for investing in property?

These are only some of the questions that you need to find out in your research. You may think that you are already familiar about property investment because you own a home yourself but there’s a huge difference between being an owner occupier versus owning an investment property. So start your research by visiting property investment content sites such as Australian Property Investor, Smart Property Investor Online, Your Investment Property Magazine and Property Observer. There are also a lot of video contents from TV shows such as Your Money Your Call and Look at Property and if you are a podcast lover, The Property Couch and Real Estate Talk are great sources of information as well. Joining property investment webinars would help immensely too but with webinars, you need to make sure that the presenters are independent and they are not trying to sell you something. Sometimes there are free webinars that comes with an “Act Now” message or a “10 Properties Left” sales pitch. Always be careful of these messages as they can often be selling you investment properties that would end up being a lemon.

When you are doing your research, always keep an objective mind. There will be many success stories that would motivate you to get started now but don’t discount the horror stories and mistakes that those investor made along the way. Although the title like “10 properties in 10 years” may sound very appealing, the strategies used for that investor may not necessarily suit you at all.

Understanding the Market

One of the positives of the Australian Property Market is there are a lot of data being collected on it. Similar to the share market, most of this data are lagging indicators. However, while it’s difficult to predict where a suburb is going, it is important to know where it stands today. Understanding the market will save you money and help you avoid poor decisions. So what are the areas that you need to research about the property market?

Some of the critical factors to consider are:

A) Property Value Trend

Although it is historical data, having an understanding on how the market has performed over the years and matching the ups and downs with significant economic events will give you an indication on how sensitive the market is. You’ll also be able to tell if the area is a relatively mature performing market or just starting out. You can access these price data trend from RP Data or Australian Property Monitors (APM).

B) Auction Clearance Rates

This is probably the closest you would get to a real time indication on the property market’s performance. Auction clearance rates indicate how many and how much properties were sold based on the total auctions that were conducted. The higher the clearance rate would generally mean a higher demand for properties in the market and would also provide a rough estimate on how high your level of competition is. Realestate.com.au and Domain usually releases these numbers on a weekly basis and they are also produce in some of the Sunday newspaper in major cities.

C) Vacancy Rates

Vacancy rates shows the percentage of vacant or untenanted rental properties in the area. A high vacancy rates would indicate that there isn’t much demand for investment properties in the area and a low vacancy rates would mean that there are a lot of renters in the market. Needless to say, the best scenario for property investors are areas with a history of consistently low vacancy rates because this would mean that the property investors are price makers in terms of rent rather than price takers. Data on vacancy rates are available on SQM Research and Australian Property Monitors (APM).

These are only some of the factors that you need to consider when researching about the area. Location data is the most important data because the area you choose will deliver between 60% – 80% of your return.

Finally, the Property

Once you’ve narrowed down to the property, some of the most basic research that you can do is actually looking at it from Google Maps or Google Earth. That way, you’ll be able to determine how far are the public transports, schools, café strips etc. Part of being an Australian property investor is not only finding a property that’s a worthwhile investment, it’s also about the surrounding area. There’s no set list of criteria. That depends entirely on your preferences. However, there is a certain degree of practicality and realism that needs to be present when you’re creating your list and doing your property investment research. For instance, you can’t find a beach side five bedroom house in a wealthy neighborhood with a swimming pool in the back yard for under $500,000 and close to the city. When buying investment property, lists are great, but you still have to have a little room for movement because not every property is made the same.

This criteria list should at least include neighborhood, square metreage of the property, land size, condition of the property, number of bedrooms, sales history and comparable sales. Other factors amenities such as whether or not the house has a garage, the crime rate of the neighborhood, retention rate, and whether the investment property already has tenants (for rental properties) can be added to narrow your search down. Once you have your list created, searching for your property instantly becomes more manageable. Most of this data should be readily available on the sales ad and you can look for some comparable sales from property search engine such as realestate.com.au, Domain or realestateView.com.au.

Finding Reliable Sources

It’s important to find reliable property websites that can provide you with all of the above information. You can get a lot of free information online but always remember to check the quality of this data and check for the last updated date. On the other hand, if you are paying to get access to those information, they should be more accurate and up to date. A website that is not properly updated or contains vague details about the property information will waste valuable time. Reliable websites update their property information on a regular basis, sometimes even daily.

Research Services

Research services are a valuable tool for prospective property investors. Especially if you’re not too savvy on how to conduct a property research from your computer. These services provide you with all the information you need about any given property for you to make an informed decision about buying. They can help with specific details and even provide facts about the Australian property market. Even though the market is unpredictable, it doesn’t rise and fall drastically from day to day and rough estimations can be made. Some services offer a prediction report using mathematical equations to predict where capital growth will stand tomorrow or even next week. A reliable research service will include sales volume, median pricing, detailed property analysis, days and stock on the market, data mapping, and much more than a regular real estate listing site can provide. Whether you need to search individual properties or market trends in 20 neighborhoods over the last 30 years, then research services are a powerful tool for all investors.

For the untrained eyes, all this information might get a little overwhelming but these level of research are the foundation to ensuring a good investment property purchase. That is why we have an in-house property research division that focuses just on analyzing this data and predicting the next location and property purchase for our clients. If you would like to talk to our property investment advisors, please visit our property investment page otherwise we wish you best of luck in your property research journey.